Second Quarter Press Conference August 3 rd, 2018

Transcription

1 Second Quarter 2018 Press Conference August 3 rd, 2018

2 Disclaimer The presentation may contain forward-looking statements about future events within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are not based on historical facts and are not assurances of future results. Such forward-looking statements merely reflect the Company s current views and estimates of future economic circumstances, industry conditions, company performance and financial results. Such terms as "anticipate", "believe", "expect", "forecast", "intend", "plan", "project", "seek", "should", along with similar or analogous expressions, are used to identify such forward-looking statements. Readers are cautioned that these statements are only projections and may differ materially from actual future results or events. Readers are referred to the documents filed by the Company with the SEC, specifically the Company s most recent Annual Report on Form 20-F, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including, among other things, risks relating to general economic and business conditions, including crude oil and other commodity prices, refining margins and prevailing exchange rates, uncertainties inherent in making estimates of our oil and gas reserves including recently discovered oil and gas reserves, international and Brazilian political, economic and social developments, receipt of governmental approvals and licenses and our ability to obtain financing. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or for any other reason. Figures for 2018 on are estimates or targets. All forward-looking statements are expressly qualified in their entirety by this cautionary statement, and you should not place reliance on any forwardlooking statement contained in this presentation. In addition, this presentation also contains certain financial measures that are not recognized under Brazilian GAAP or IFRS. These measures do not have standardized meanings and may not be comparable to similarly-titled measures provided by other companies. We are providing these measures because we use them as a measure of company performance; they should not be considered in isolation or as a substitute for other financial measures that have been disclosed in accordance with Brazilian GAAP or IFRS. NON-SEC COMPLIANT OIL AND GAS RESERVES: CAUTIONARY STATEMENT FOR US INVESTORS We present certain data in this presentation, such as oil and gas resources, that we are not permitted to present in documents filed with the United States Securities and Exchange Commission (SEC) under new Subpart 1200 to Regulation S-K because such terms do not qualify as proved, probable or possible reserves under Rule 4-10(a) of Regulation S-X. 2

3 Focus on top metrics TOTAL RECORDABLE INJURIES TRI per million man-hour frequency rate Q17 2Q17 3Q17 4Q17 1Q18 2Q NET DEBT/ADJUSTED EBITDA * 3.07* 2.86* Q17 2Q17 3Q17 4Q17 1Q18 2Q18 * Excluding the Class Action agreement 3

4 Main Highlights Operations Start of operation of the 1 st production system in the Transfer of Rights area in Búzios field, with the P-74, and a new production system in Campos Basin, in the Tartaruga Verde field Arrival in Brazil of P-67, that will operate in Lula field Expansion of exploratory portfolio by 31% since 2017 Constant improvement in financial results Net income of R$ 17 billion, growth of 257% and best result since 2011 Operating income of R$ 34.5 billion, 18% higher than Evolution of the deleveraging process Lowest level of debt since 2012: Gross of US$ 92 billion and Net of US$ 74 billion Reduction of R$ 1.6 billion in financial expenses in the first half Shareholders remuneration Anticipation of Interest on Capital: R$ 0.05 per share (Preferred and Common), totaling R$ 652 million 4

5 Monitoring the Business and Management Plan Given the results achieved and constant monitoring of the Business and Management Plan, we adjusted the projections for year end 2018, maintaining the top metrics disclosed in BMP : TOTAL RECORDABLE INJURIES TRI of 1.00 (alert limit) Net Debt/ Adjusted EBITDA of 2.5 Partnerships and Disinvestments: cash-in of US$ 7 billion in 2018 Investments US$ 15 billion in 2018, keeping total investment of US$ 74.5 billion to the horizon 5

6 Higher Brent and depreciation of the Real BRENT (US$/bbl) EXCHANGE RATE (R$/US$) Q17 2Q17 3Q17 4Q17 1Q18 2Q Q17 2Q17 3Q17 4Q17 1Q18 2Q % Between and + 8% Between and 6

7 Operating Income growth of 18% and Net Income 257% (R$ billion) Operating Income Net Income Higher Brent and Real depreciation % % 17.0 Higher margins: - Oil exports - Oil products sales 4.8 Lower general and administrative expenses and equipment idleness Better financial result, especially lower financial expenses, due to the debt reduction 7

8 Debt reduction (US$ billion) Q17 1Q18 2Q18 Gross Debt Net Debt 4Q17 2Q18 Average interest rate (% a.a.) Average Duration (years) Leverage (%)

9 Liability Management (US$ billion) Amortization Schedule Position as of 06/30/ Revolving Credit Facilities* CASH POSITION *US$ 4.35 billion with 17 banks + R$ 4 billion with Banco do Brasil and Bradesco 9

10 Control of operating costs Lifting Cost US$/boe (R$ billion) -7% General and Administrative Expenses Sales Expenses % 8.9 1Q18 2Q % 4.3 Refining Cost in Brazil R$/bbl % 8.6 1Q18 2Q18 10

11 Partnerships and divestments Total cash-in in the first half: US$ 5 billion Competitive Processes Non-binding phase Binding phase Closed Strategic Partnerships Paraguai assets* Roncador field (25%) Pasadena Refinery Azulão Sergipe Alagoas deep water Shallow water fields (RJ, SP e SE) Suape e Citepe Tartaruga Verde and Mestiça and Module 3 Espadarte Fields (50%) Onshore fields São Martinho Baúna Field BSBIOS Shallow water fields (CE e RN) Petrobras Oil & Gas B.V. ( POGBV ) Piranema e Piranema Sul fields (SE) Maromba field (RJ) Liquigás (Fine) Carcará (2 nd installment) Lapa e Iara Memorandum of Understanding on renewable energy Letter of Intent to promote investments in the Comperj Refinery and in Marlim field Suspended processes: Araucária Nitrogenados, TAG, Refiniries (South and Northeast hubs) * Pending external approvals 11

12 Adjusted EBITDA Exploration and Production (R$ billion) % % 49.5 High Brent Lower equipment idleness Higher payment of government participation Refining, transport and marketing % 14.7 Lower sales volume Lower margins of diesel and gasoline compared to Brent, offset by the effect of inventories formed at lower prices 12

13 Shareholder Remuneration The anticipation of interest on capital for shareholders was approved by the Board of Directors Interest on Capital for ON and PN Amount Date of payment 1 st Quarter R$0.05 per share R$ millions 05/29/ nd Quarter R$0.05 per share R$ millions 08/23/2018 Total R$ 1,304.4 millions 13

14 Value contribution to society Taxes and Government Participation % 75.2 (R$ billion) Net Profit Total first half % % Government 1S18 State + Municipal Federal 14

15 Operational Highlights 15

16 Production in line with the target set for 2018 OIL AND GAS PRODUCTION (MMboed) 2.8-4% Operated production in the Pre-salt exceeds 1.5 MMbpd In the last days of April Oil + Gas Abroad Gas Brazil Oil Brazil 2018* * Production target BMP

17 Campos Basin: attractive exploration opportunities Campos Basin Extension of Marlim Sul concession until 2052 Partnership in Roncador: recovery factor increase estimated at 5% First oil in Tartaruga Verde 2 exploratory clusters of high potential, with 12 new blocks 17

18 Expansion of the exploratory portfolio by acquiring areas of great potential 20 blocks in 5 bidding rounds Campos Basin Expansion of exploratory areas: new frontiers in the Campos, Santos, Paraná and Potiguar basins Sudoeste de Tartaruga Verde Setor SC-AP3 Dois Irmãos Alto de Cabo Frio Central Setor SC-AP5 4 th Round of Production Sharing Agreement Partnerships in Três Marias, Uirapuru e Dois Irmãos Uirapuru Entorno de Sapinhoá Santos Basin Três Marias Peroba Non-operator Operator 4 th Round (operator) 5 th Round of Production Sharing Agreement Right of first refusal: Sudoeste de Tartaruga Verde Right of first refusal 5 th Round 18

19 Well with the largest oil column ever found in the Santos Basin Pre-salt Production fields operated in the Pre-salt of Santos basin SURURU FIELD 42.5% 22.5% 25% 10% Búzios Mero Well completed in 07/13 Cernambi Lula Oil column 530 meters The average of the 5 wells in the Pre-salt with the largest oil column is

20 Start of Transfer of Rights production and another system in the Campos Basin Búzios FPSO P-74 Tartaruga Verde FPSO Cid. Campos dos Goytacazes 1 st Oil of Transfer of Rights in April 20 Current Production* 30 kboed 1 st Oil in June 22 Current Production* 25 kboed Start of 2 nd producer well in July 03 * Average July/

21 Growth expected due to the startup of new systems 93% of wells for 2018 have been completed Lula Norte FPSO P-67 Búzios FPSO P-75 Lula Extremo Sul FPSO P-69 Búzios FPSO P-76 Guanabara Bay In transit to Brazil Angra dos Reis Pontal do Paraná Oil Cap.: 150 kbpd Oil Cap.: 150 kbpd Oil Cap.: 150 kbpd Oil Cap.: 150 kbpd WI Petrobras: 65% WI Petrobras: 100% WI Petrobras: 65% WI Petrobras: 100% Arrival at location 3Q18 Arrival at location 3Q18 Leaving shipyard 3Q18 Leaving shipyard 4Q18 Egina FPSO Egina 4Q18 Oil Cap.: 200 kbpd Berbigão FPSO P Oil Cap.: 150 kbpd 21

22 Lower sales volume of oil products in the accumulated comparison Participation of Domestic oil in the processed feedstock (%) SALES VOLUME * (Kbbl/day) OIL PRODUCTS PRODUCTION (kbbl/day) 1,849 1,720 1,805 1, Refining Plants Operational Availability (%) Decline in total demand for oil products Loss of market share for ethanol Increase of Biodiesel in the mix Others Gasoline Diesel *Include inter-segments and third party sales. Does not include BR Distribuidora 22

23 Higher utilization of assets due to Market Share increase Diesel (%) JAN FEB MAR APR MAY JUN Gasoline (%) JAN FEB MAR APR MAY JUN Utilization Factor (%) JAN FEB MAR APR MAY JUN 23

24 Improvement in the efficiency of logistics operations Number of oil cabotage vessels Higher integration between Upstream and Downstream in the vessel scheduling, with higher efficiency and operational safety Lower number of oil cabotage vessels reducing the offloading unit cost by 15%, without loss of 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 service level Average of the period 24

25 Exports of 638 kbpd of oil and oil products in the first half, with a net balance of 372 kbpd Imports (kbbl/day) Exports (kbbl/day) Net Balance (kbbl/day) Crude Oil Oil products 25

26 Stable natural gas sales with increase of the nonthermoelectric segment participation Natural Gas supply (MMm 3 /day) Natural Gas demand (MMm 3 /day) LNG Non-Thermoelectric Bolivia Thermoelectric Domestic System Gas

27 Thermoelectric Generation (MWmed) Reservoir Level NIS* (%) ,351 2, jan feb mar apr may jun jul aug sep oct nov dec Load NIS* (average GW) Hydrological NIS* (%MLT) PLD** Southeast (R$/MWh) 1,966 2, Q18 *NIS National Integrated System 2Q18 **PLD difference settlement price 1Q18 2Q18 1Q18 2Q18 1Q18 2Q18 27

28 RESULTS ANNOUNCEMENT Second Quarter 2018 Press Conference